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  • Home>Practice Management>Technology>10 Technology Years in the Life of a Financial Advisor

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    10 Technology Years in the Life of a Financial Advisor

    From snail mail to the cloud, we’ve come a long way.

    Sheryl Rowling, 06/13/2017

    In honor of Morningstar magazine’s 10-year anniversary, I was asked to go off-topic for this issue’s column. This article will look at technology’s role in my practice over the past 10 years.

    I’m old enough to remember the Dark Ages of preparing tax returns by hand. We used huge columnar pads and pencils as well as adding machines. In the Middle Ages, when tax programs became available, we happily sent data sheets for processing by either courier or mail. I also remember the first desktop computers. We took turns using the few computers in the office. It was certainly a time-saver when calculating depreciation for multiple assets (insert sarcasm). We had to do all of the input first before calculating the spreadsheet, which could take 30 minutes or more.

    Technology has advanced exponentially in the past 10 years. Now, financial advisors like myself rely heavily on computers to track clients’ portfolios and to assist with performing many necessary tasks. Let’s take a trip back in time and fast forward to today while I compare technology in my practice then and now.

    Financial Planning
    Then: Spreadsheets
    Now: MoneyGuidePro
    Central to any financial advisory practice is financial planning. Ten years ago, we couldn’t find financial planning software that could handle state income taxes or unmarried couples— nor could we find software that was not too complicated for data input or in its client presentations. So, we used a combination of self-created integrated spreadsheets and editable Word documents. After many years of this method, we found it difficult to keep up with tax law changes and discovered that financial planning software had evolved. We began using Naviplan. It was a huge improvement. However, about five years ago, we were “forced” to switch to MoneyGuidePro (don’t ask). We really liked its structure, client output, and ability to work with clients interactively.

    CRM
    Then: Junxure basic
    Now: Junxure Cloud
    In the old days, we kept track of clients using database tools such as FoxPro. It was antiquated MS-DOS software. When CRM software designed specifically for financial advisors came out, we jumped on the bandwagon with Junxure. We used Junxure 10 years ago and have continued to use it. What’s different between then and now? We started with using only the basic functionalities, and now we rely on Junxure as the hub of our office. Not only does Junxure contain all of our client information, it also integrates with PortfolioCenter (our portfolio accounting software that we’ve used for over 10 years). We have clients’ investment details at our fingertips, and it retains all email correspondence between us and our clients, holds notes from client meetings, communicates information and assignments to and from employees, contains workflows, allows segmentation of clients, sends out mass emails to all clients or particular groups, and is our paperless filing room. Although Junxure is still server-based in our office, we plan to convert to Junxure Cloud this year.

    Rebalancing
    Then: iRebal
    Now: Morningstar Total Rebalance Expert
    Believe it or not, 10 years ago, we were using rebalancing software. Going from manual rebalancing (or spreadsheets) to automation changed our lives. What was a huge project that could only be attempted four times a year became “as needed” throughout the year with minimal effort, no trade errors, and maximum tax efficiency. In the beginning, choices were limited, and we went with iRebal. It made a “day and night” difference in our practice, but it cost $50,000 per year and took two of us 20 hours a week for six months to get up and running. Then, it was acquired by a custodian. We were concerned that, at some point, the software wouldn’t be available to us.

    Knowing that we never wanted to be without rebalancing software, that the only other product available was too complicated to use (as reported by my right-hand person who helped me implement iRebal and did two demos with the competitor), and that there was nothing on the market (including iRebal) that did everything I envisioned in rebalancing software, I made a naive decision: I would build a rebalancing software that was affordable, easy to implement and use—and took tax efficiency to the nth degree. As crazy as that decision was, my vision became reality in Total Rebalance Expert (now Morningstar Total Rebalance Expert).

    Remote Access
    Then: Stuck in the office
    Now: Microsoft remote server access from anywhere
    Ten years ago, it was not possible to truly work remotely. We could create files on our home computers and send them via email to ourselves, or for big files, we could save to a thumb drive. The only way to share information between work and home was to use a thumb drive. This was not the most secure methodology because of the potential to lose drives containing private client information, unknowingly allow viruses into our work computers, and have company files on unsecured home computers. Although transferring private client information in any way to our home computers (or anywhere outside the confines of our office) was not allowed, we had no way of enforcing the rule.

    .